Harmony(HMY)2024-10-31 16:23Capital Expenditures - Capital expenditures for fiscal 2024 amounted to R8,327 million, an increase from R7,598 million in fiscal 2023[105]. - The capital expenditure budget for fiscal 2025 is approximately R10,781 million, excluding capital allocated for renewables and international projects[106]. - The focus of capital expenditures in recent years has been on underground development and major projects such as Zaaiplaats and Kareerand[105]. - During fiscal 2024, capital expenditures at Hidden Valley accounted for 19% of the total, while Mine Waste Solutions accounted for 18%[105]. - The company has budgeted R1,469 million for Moab Khotsong and R2,148 million for Mponeng in the fiscal 2025 capital expenditure plan[106]. Dividends and Financial Transfers - A final dividend of 94 SA cents was declared on September 4, 2024, and paid on October 14, 2024[103]. - Harmony will transfer a one-off amount of R350 million to RMA Life Assurance for the transfer of medical liabilities[103]. Mining Regulations and Compliance - The Mining Charter III, effective from September 27, 2018, replaces the Original and Amended Charters, imposing new obligations for HDSA participation in ownership and procurement[111]. - Mining companies must achieve a minimum of 30% BEE shareholding for new mining rights, with specific allocations for employees, host communities, and BEE entrepreneurs[111]. - A minimum of 70% of total mining goods procurement spend must be on South African manufactured goods, while 80% of total spend on services must be sourced from South African companies[111]. - The 2021 Judgment set aside certain provisions of Mining Charter III but allowed the remainder to continue in force, indicating ongoing legal scrutiny of the Charter[113]. - Mining rights holders must comply with ownership requirements at all times, with non-compliance potentially leading to suspension or cancellation of mining rights[111]. - The Minister may review Mining Charter III by notice in the Government Gazette, indicating potential for future amendments[111]. - Historical BEE credentials will not be recognized for the renewal and transfer of existing mining rights, requiring compliance with new ownership requirements[111]. - A minimum representation of HDSAs in management positions is mandated, including 50% on the Board and 60% in senior management[111]. - The Amended Regulations require mining rights holders to contribute to socio-economic development in both local and labor-sending areas[114]. - The BBBEE Act, established in 2004, aims to increase black participation in the South African economy to remedy historical racial imbalances[116]. - The BBBEE Codes, revised in 2013 and effective from 2015, provide a framework for measuring BBBEE across all sectors, including mining[116]. - The Mining Charter governs BBBEE implementation in the mining industry, but its relationship with the BBBEE Codes remains unclear[118]. Environmental Regulations - The NEMLAA, effective June 30, 2023, introduced new financial provision requirements for environmental liabilities, impacting mining operations[145]. - Financial provision must be assessed annually and adjusted to the satisfaction of the Minister, with a maximum fine for non-compliance increased from R5 million to R10 million[145]. - The environmental authorization process in South Africa requires compliance with various environmental laws, with significant penalties for non-compliance[144]. - The NEMA mandates that mining companies maintain financial provision even after receiving a closure certificate, ensuring ongoing environmental liability management[145]. - Harmony remains liable for environmental impacts post-closure, even after obtaining a closure certificate, ensuring long-term compliance with environmental regulations[145]. - The company faces potential liabilities of up to R10 million and/or 10 years imprisonment for failing to comply with environmental regulations[147]. - The introduction of the Carbon Tax Act aims to reduce greenhouse gas emissions, effective from June 1, 2019[152]. - The company must report GHG emissions and activity data for operations involving fuel combustion activities exceeding 10MW by March 31 each year[151]. - The NWA requires most mining operations to obtain a water use license, which can be difficult and time-consuming to secure[150]. - The company is subject to the Waste Act, which regulates waste management activities and may impose penalties for non-compliance[149]. - The Climate Change Act, signed into law on July 18, 2024, will regulate greenhouse gas emitting sectors once effective[153]. - The company must comply with the management measures for residue stockpiles and deposits as per the Regulations for Residue Stockpiles and Residue Deposits[149]. Production and Resource Estimates - Gold production for the fiscal year ended June 30, 2024, was 48,578 kg, an increase from 45,651 kg in 2023, representing a growth of approximately 4.2%[183]. - As of June 30, 2024, Harmony's total gold Mineral Resources (exclusive of Mineral Reserves) were estimated at 64.4 million ounces, while Mineral Reserves were 22.5 million ounces[179]. - The estimated Mineral Resources for the underground mining operations in the West Rand were 26.7 million ounces, with Mineral Reserves of 6.8 million ounces as of June 30, 2024[179]. - The company has a 50% interest in the Wafi-Golpu Project in Papua New Guinea, with combined estimated Mineral Resources of 20.5 million ounces and Mineral Reserves of 17.7 million ounces as of June 30, 2024[179]. - The total cash operating costs are adjusted for historical data and current cost environment changes, including restructuring and cost-reduction initiatives[187]. - The reported Mineral Reserves are accessible from existing infrastructure or infrastructure under development, with extraction factors generally not exceeding 85%[187][188]. - The total measured and indicated resources in South Africa amounted to 1,111.874 thousand kg[193]. - The total Mineral Reserves for South Africa amounted to 1,202.835 million tonnes with a total gold content of 700.582 thousand kg[198]. - The total Mineral Reserves for Papua New Guinea were reported at 206.540 million tonnes with a total gold content of 185.660 thousand kg[198]. - The company reported a total of 1,409.375 million tonnes of Mineral Reserves across all operations, with a total gold content of 886.242 thousand kg[198]. Market Conditions and Economic Factors - The price of gold and silver reached record highs in 2024 due to escalating geopolitical tensions and safe haven demand[168]. - The ongoing war in Ukraine and tensions in the Middle East have caused significant disruptions in financial markets and key commodities[169]. - The South African government is committed to implementing a minimum global tax rate of 15% as part of the OECD's Pillar 2 proposals, with a Draft Global Minimum Tax Bill released for public comment[172]. Project Developments - The Queensland Government announced a conditional grant funding of A$20.7 million for Eva Copper, subject to a positive final investment decision by January 2026[103]. - The Eva Copper Project has undergone various amendments, with the current Environmental Authority issued on June 12, 2024[154]. - The company is preparing a Progressive Rehabilitation and Closure Plan for the Eva Copper Project to outline site rehabilitation post-mining[155]. - The existing closure policy requires tenement holders to provide adequate financial assurance for mine closure obligations[161]. - The proposed National Content Policy for Resource Sectors 2023-2027 focuses on domestic procurement, localization of employment, and sustainable development[166]. Legal and Compliance Issues - There is no material litigation against Harmony that threatens its mineral rights, tenure, or operations[206]. - No fines or penalties for non-compliance were incurred during the year ended June 30, 2024[210]. - The company has conducted a total of 248 drill holes into nine TSFs between January 2017 and February 2020 to determine grade estimates[255].